(Updated 2/5/99)
N.B. Above Chart is abstracted from Metastock Program

Last week, we predicted that STI would undergo a correction in middle of the week and indeed we were right and it did happen in according to our expectation.
Unfortunately, we were expecting a correction towards the range of 1,700-1,760 before an upmove occurred, but the correction only reached 1,781 and was 21 points out of our minimum target. Does it mean that the correction is now over, and that we should see STI moving towards 1,950-2,050 in the near future? Monday will be a crucial test for STI to see if the rebound on last Friday was sustainable. If we look back to last week activities, we had seen Nikkei started to come down due to worry about the coming coporates results, but Hang Seng remained strong towards the Friday closing. As for Dow Jones, it had make a reverse by continued upsurge through the week but closed at -89 points due to the better than expected 1st quarter GDP and the worry of inflation. Judging from the above international markets performance, it was rather mix and did not present us any clear picture for the coming week. However, with the Nikkei close for 3 days due to the Golden week, expect market to give full attention to Dow Jones movement for any clue. If the inflation fear continue to spread from T bond market towards Stock market in US, we will start seeing Dow Jones going through a long over due correction. In this case, STI will probably be dragged down by it too. In our domestic front, most of the good news had already happened in the past weeks. Properties received good sale and our government revised of our GDP from -1%-1% growth towards 0%-2% growth were all within market expectation and should not play a major role in the coming week. We expect STI to confine in a range trading while waiting for fresh leads. Although an upmove above 1,904 is still possible, it would probably be capped at 2,000. And most likely than not, a correction towards 1,700-1,760 is still in the card and may bappen in the coming week. Investors are advised to take profit on any rally and stay sideline until a clearer picture emerge.

We are now in a cross road again, which in no time we will probably have to decide which is the scenarios presented in our "Long Term Perspective" side is more likely than the others. If market continue to burst upward next week with strong volume and break through 2,000 level at ease, then our current preferred count may be right. Alternatively, if a correction occur next week, than we have to wait for the next upmove to confirm our preferred count. Whatever it is, I think we should probably know the answer by May.

Events To Watch For The Coming Weeks/Month

1. The war development in Kosovo.
2. The movement of US stock market and T-bond.
3. Hang Seng Index movement.
4. Nikkei and JGB movement.
5. The stability of Regional and Singapore currencies (especially Indonesia Ruppiah)
6. Regional stock markets movement.
7. Singapore 3 months Inter-bank rate.